Government looks for new spending cuts of up to 6%

Government departments have been told to find spending cuts of up to 6% as part of plans to save £3.5bn by 2020.

Ahead of next week’s Budget, the Treasury announced Whitehall would begin coming up with ways to contribute to its “efficiency review”.

It said the NHS and core schools budgets would not be included, with savings found by councils to be spent on under-pressure social services.

Labour accused the government of “sneaking out… more Tory austerity”.

Departments have already faced significant cuts in their budgets since 2010, but they will now be told to find further savings of between 2% and 6% by 2019-20, the Treasury said, with up to £1bn to be reinvested in “priority areas”.

It added that the government would continue to spend spend 2% of GDP on defence, and it remains legally obliged to spend 0.7% on overseas aid.

‘Maximum value’

The planned savings are due to be introduced around the time the UK is scheduled to be leaving the EU, and just before the next general election.

Chief Secretary to the Treasury David Gauke said the government was committed to delivering services “in the most efficient way possible”.

He added: “There has been considerable progress, but there is further to go and the whole of government is working together to consider how we can live within our means while delivering maximum value for every pound of taxpayers’ money.”

But shadow chancellor John McDonnell said the announcement showed Chancellor Philip Hammond “represents more of the same Tory austerity”.

“Sneaking out an announcement asking departments to model cuts of 3% to 6% for 2019-20 is no way to manage public spending,” he said.

“Hammond urgently needs to explain why this announcement was made in the way it was and why after seven years of failed austerity he thinks more of the same will now work.”